TextNow opens office in San Francisco as more North Americans seek alternative phone plans

textnow

Waterloo-based TextNow, which is using cloud-based technology to make phone plans cheaper, appears to be gaining widespread appeal in Canada — where our phone plans are infamously sky-high. After the company found 75 percent year-over-year growth in 2015 with $20 million in revenue, TextNow expanding its presence in the US by opening an office in San Francisco’s SoMa district.

TextNow CEO Derek Ting said that the growth is particularly interesting because the company isn’t relying on major funding for growth, but has still managed to maintain profitability while taking on the massive telecom industry. Two million users are joining TextNow each month, 500 million messages and 81 million calls are sent and made each month, and there have been one billion calls since 2014.

“Even more surprising is that this growth has been fuelled primarily by organic demand, we have not even pulled the paid acquisition levers yet,” said Ting. “Our organic baselines are extremely healthy so we are really looking forward to putting our foot on the gas and investing aggressively in performance marketing to scale the business.”

Chas Castell, former head of mobile advertising at Scopely and a driving force behind building Warner Bros’ first mobile ad network, will join as vice president of revenue operations, while Mark Braatz, who formerly served as vice president of user acquisition at video game company KIXEYE directing over $65 million in marketing investments, will act as TextNow’s general manager and vice president of growth.

“Our numbers strongly highlight the demand for the TextNow service and key executive hires such as Mark and Chas will aid in propelling the company to continue its path forward offering a stellar alternative to costly existing mobile phone services,” said Ting.

The company raised a $1.5 million seed round in 2011 led by Freestyle Capital with participation by the Menlo Talent Fund, Menlo Ventures’ Seed Program, as well as prominent investors Troy Carter and Scooter Braun. TextNow’s cloud-based mobile service allows users to use their phone numbers across multiple platforms and devices, and uses a hybrid model of WiFi and traditional phone service to offer affordable mobile service.

Waterloo Mayor Dave Jaworsky of Waterloo and Cambridge Mayor Doug Craig also stopped by to visit the space.

Jessica Galang

Jessica Galang

Jessica Galang is BetaKit's News Editor.